4.2 Journal

Lay started Chen Trading with $40,000 deposited into the business bank account. State the double entry to record the transaction.

• Dr Capital

  Cr Cash at bank

• Dr Capital

  Cr Cash in hand

• Dr Cash at bank

  Cr Cash in hand

• Dr Cash at bank

  Cr Capital

Business purchased inventory costing $10,000 on credit from Tan.

• Dr Inventory $10,000; Cr Cash at bank $10,000

• Dr Cash at bank $10,000; Cr Inventory $10,000

• Dr Inventory $10,000; Cr Trade payable – Tan $10,000

• Dr Trade payable – Tan $10,000; Cr Inventory $10,000

Business purchased inventory worth $5,000 by cheque.

• Dr Inventory

  Cr Cash in hand

• Dr Cash in hand

  Cr Inventory

• Dr Inventory

  Cr Cash at bank

• Dr Cash at bank

  Cr Inventory

Business obtained a loan of $30,000 from Prestige bank.

• Dr Cash at bank $30,000; Cr Loan from Prestige Bank $30,000

• Dr Cash in hand $30,000; Cr Loan from Prestige Bank $30,000

• Dr Loan from Prestige Bank $30,000; Cr Cash at bank $30,000

• Dr Loan from Prestige Bank $30,000; Cr Cash in hand $30,000

Business paid rent of $1,650 by cheque.

• Dr Cash at bank $1,650; Cr Rent expense $1,650

• Dr Rent expense $1,650; Cr Cash in hand $1,650

• Dr Rent expense $1,650; Cr Cash at bank $1,650

• Dr Cash in hand $1,650; Cr Rent expense $1,650

Business bought fixtures and fittings worth $8,000 from Lee .$3,000 cheque was issued with the remaining amount to be paid within a year.

• Dr Cash at bank $3,000; Dr Trade payable – Lee $5,000; Cr Fixtures and fittings $8,000

• Dr Fixtures and fittings $8,000; Cr Cash at bank $3,000; Cr Trade payable – Lee $5,000

• Dr Fixtures and fittings $8,000; Cr Cash in hand $3,000; Cr Trade payable – Lee $5,000

• Dr Fixtures and fittings $8,000; Cr Cash at bank $5,000; Cr Trade payable – Lee $3,000

Business sold inventory and received $500 in cash. The cost of the inventory was $100.

• Dr Cash in hand $500; Cr Sales revenue $500; Dr Cost of sales $100; Cr Inventory $100

• Dr Sales revenue $500; Cr Cash in hand $500; Dr Inventory $100; Cr Cost of sales $100

• Dr Cash at bank $500; Cr Sales revenue $500; Dr Cost of sales $100; Cr Inventory $100

• Dr Cash at bank $500; Cr Sales revenue $500; Dr Inventory $500; Cr Cost of sales $500

Business sold inventory worth $2,000 to customer, Soh, on credit. The cost of the inventory was $800.

• Dr Trade receivable – Soh $2,000; Cr Cash at bank $2,000; Dr Cost of sales $800; Cr Inventory $800

• Dr Sales revenue $2,000; Cr Trade receivable – Soh $2,000; Dr Inventory $800; Cr Cost of sales $800

• Dr Trade receivable – Soh $2,000; Cr Sales revenue $2,000; Dr Cost of sales $800; Cr Inventory $800

• Dr Cash at bank $2,000; Cr Sales revenue $2,000; Dr Cost of sales $800; Cr Inventory $800